HOW THE SYSTEM WORKS
A person with knowledge of a scheme that defrauds the government
needs legal advice. Whether someone's own employer or a competitor
is stealing Uncle Sam's money, silence is hardly golden. It
can be dangerous. Threats, jail and unemployment can befall
the conscientious non-government employee who tries to "fix"
the problem by reporting it to management.
A lawyer familiar with the federal False Claims Act can advise
the client, who is called a "relator," whether the
facts are covered by the act, and what the client can do.
The employer may never need to know that the client sought
advice about suspected corruption.
If the facts warrant further investigation, the lawyer will
advise the client - both about the facts, as his investigation
unfolds them, and about the law. If warranted, and the client
is agreeable, the lawyer can draft a suit on behalf of the
relator naming the defrauding party as a defendant. The suit,
which is called a "Qui Tam" action, is filed in
secret, under seal, in federal court. The lawyer sends a copy
of the suit to the local United States Attorney and the U.S.
Attorney General.
The Justice Department then investigates the allegations
in the suit, usually with the help of the FBI, and can ask
for an extension to investigate more fully. The suit remains
under seal, and the relator's identity is protected. The process
can be complex. Cooperative interaction between the government
and the relator's attorney is critical.
WHY COMPANIES PAY IT BACK
The companies that have built vast fortunes by defrauding
the U. S. Treasury pay the government back. The Act's "finder's
fee" is attractive - except to those caught stealing
from Uncle Sam. Scores of whistleblowers have received multi-million
dollar rewards for reporting fraud against the government.
If the Justice Department decides to act, it can prosecute
both the relator's civil suit to recover the stolen money
- and much more - plus it can take criminal action against
the wrongdoers. The Act provides for recovery of three times
the amount stolen. And, it allows the court to assess a penalty
of $10,000 for each violation of the Act. Typically, there
are thousands of acts involved in a Qui Tam case, and the
total penalty could be in the hundreds of millions of dollars.
Sometimes the government may decline to take legal action.
This could be for a number of reasons. If the government does
not prosecute, the relator, with the aid of his lawyer, may
choose to go to trial to bring the defrauding company to justice.
To find out about your rights and responsibilities, contact
a member of the Anti Fraud Law Group for a free professional
consultation.
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